Cash & Liquidity Management

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A Brew with All the Right Ingredients One of the world’s largest brewers, SABMiller has brewing interests and distribution agreements across six continents. Their wide port- folio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch along with market-leading local brands such as Aguila (Colombia), Castle (South Africa), Miller Lite (USA), Snow (China) and Tyskie (Poland). The company is also one of the world’s largest bottlers of Coca-Cola products. At Group Treasury in SABMiller plc’s office in Woking, UK, we currently set policy, arrange the funding requirements of the group, alongside running the treasury and risk management activities of the parent company and the group’s cross- currency cash pool.

A Brew with All the Right Ingredients:

Working with Business Partners to Enhance Bank Connectivity

by Guy Ingram, Treasury Manager, SABMiller

One of the world’s largest brewers, SABMiller has brewing interests and distribution agreements across six continents. Their wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch along with market-leading local brands such as Aguila (Colombia), Castle (South Africa), Miller Lite (USA), Snow (China) and Tyskie (Poland). The company is also one of the world’s largest bottlers of Coca-Cola products.

Treasury Organisations

At Group Treasury in SABMiller plc’s office in Woking, UK, we currently set policy, arrange the funding requirements of the group, alongside running the treasury and risk management activities of the parent company and the group’s cross-currency cash pool. Outside head office, each business currently takes care of its own treasury requirements, either through a local treasury in the case of larger businesses, or as part of the regular finance function. These activities are largely focused on day-to-day cash management and, currently, hedging of foreign currency exposures, although the intention is to move the management of foreign currency to the centre where this makes sense to do so. Each group company currently maintains its own banking relationships so there are dozens of banks with which we work around the globe, although there is a project underway that will rationalise the number of relationship banks in due course.

Barclays is a key relationship bank for SABMiller PLC and has significant expertise in SWIFT connectivity for corporates.

Technology in Treasury

We currently manage our treasury operations using a combination of disparate legacy systems, both in Group Treasury and in local treasury centres. The first step in introducing greater consistency was to introduce a specialist system to manage our activities in a more robust fashion and allow us to collate treasury information easily across the group. We wanted to introduce more efficient and standardised processes across each of our businesses, improve visibility of exposures across the group and automate bank communications. In 2007, we took the decision to implement a treasury management system (TMS) and, after a rigorous selection process, we selected IT2 from IT2 Treasury Solutions. We intend to go live with the IT2 system in Group Treasury during the first quarter of 2009 and then plan to roll it out across the group over the next two years.

Options for Bank Connectivity

Implementing a new system, particularly to replace manual processes, has required a complete redesign of business processes. Bearing in mind the large number of banking relationships we have, and the diversity of locations, we had to find an efficient way of connecting with our banks, wherever they are in the world. We identified various alternatives:

Firstly, we could implement separate, proprietary connections to each bank individually. This would have been highly costly and resource-intensive.

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